Latin Lawyer Awards Haynes and Boone Restructuring Deal of the Year

04/01/2014

MEXICO CITY – Latin Lawyer has awarded Haynes and Boone, SC its 2013 Restructuring Deal of the Year for serving as counsel to the consenting creditors in the groundbreaking bankruptcy case of Mexico’s largest glassmaker, Vitro.

The firm’s lawyers, Mexico City Partner Antonio Franck and Of Counsel Luis Manuel Mejan, got involved when Vitro declared voluntary insolvency in 2009 after defaulting on bond payments. Vitro won approval for its pre-packaged bankruptcy plan in Mexico, and it was anticipated that U.S. would simply approve the deal.

But circumstances took quite a different turn and, ultimately, the case would become one of the most important bankruptcy proceedings in the country’s history, calling into question the judicial independence enshrined in Chapter 15 of U.S bankruptcy legislation passed four years before the filing.

In an unprecedented move, the U.S. Bankruptcy Court refused to enforce the pre-package plan, leading to an extended period of litigation in courts from Texas to New York to Mexico City. For four years, the legal battles raged on before all parties could eventually reach a settlement in 2013.

Along the way, the face of international bankruptcy law was profoundly changed. In addition to becoming the first Mexican case where a plan approved in Mexico was not enforced in the U.S., a Fifth Circuit decision effectively created new law on how U.S. bankruptcy courts should evaluate requests for relief in the U.S. by foreign debtors.

Essentially, the court described a new analytical framework that requires foreign debtors and their approved plans to meet the requirements of certain sections of the U.S. bankruptcy code as if they were U.S. debtors.

“This case will undoubtedly cause companies to reconsider whether they should seek to enforce Mexico plans in the U.S., risking the chance that they may need to re-litigate the entire case,” said Franck. “It was a fascinating restructuring matter in which we were privileged to participate.”

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